Using sub-contractors

[Innominata]

Hi Guys,
Just a word of advice,I recently set up as a sole trader and on some jobs I use another self employed Electrician.I have been paying him and asking for an invoice.However according to an accountant that I was speaking to,I should be registered as a contractor and use the other Electrician as a sub contractor and deduct tax from his money and forward to the revenue every month.This has been confirmed by the CIS but only applies to certain jobs that fall within the CIS scheme.It is a can of worms with a few grey areas so be careful about your tax liabilies.Anybody got any thoughts on this?

 

[acat]

I thought that only applied if the sub contractor was not CIS registered I know you are supposed to ask for their inland revenue URNs.


Chris

 

[Innominata]

Hi Acat,they should be registered but CIS will confirm via their URN and NI numbers

 

[acat]

Suppose you are left with the bill then as if things arent bad enough already


Chris

 

[eddielarge]

Yes i always deduct 20% unless they are cis 6 then they deduct their own tax..

the other thing to be carefull with is , if you are not VAT registered make sure they are not otherwise you will be paying more per day than you thought

 

[b-spark]

Hope this helps
Both my parents are tax inspectors.
Its totally fine to use casual labour for bits and bobs if your using them to for months then it becomes a problem, because there losing tax and ni. You should always get invoices from them. They need to be self employed and bills should provide instruction of services supplied. Thats why you find alot of subbys who work for main contractors have all become ltd. Alot of my mates who work for big refurb companys all the time do it that way.There really not fussed for one man teams trying to make a do. Its when you start turning over 10 grand a year but put through a 20 grand vito and a kawasaki generator.In a lovely green costing £6000 which somehow is kept at a jet ski yard on the coast of spain!
Thats one of my old mans funny stories

 

[Des 56]

I have heard that if you register as a contractor and the services of a subby are not used again
You are then roped into a system where you declare each month that you have "no labour" therefore no payments to make
Failure to notify monthly the" no payments" result in regular monthly fines each time of £100